Compound Interest Calculation: From $14,050 to $26,500

How long does it take for $14,050 to grow to $26,500 at an interest rate of 15.867%?

Is it 4.54 years, 423.33 years, 0.59 years, or 12.23 years?

Answer:

The correct answer is 4.54 years.

It takes approximately 4.54 years for $14,050 to grow to $26,500 at an interest rate of 15.867%. To calculate the time it takes for an investment to grow from $14,050 to $26,500, we need to consider the interest rate. The interest rate of 15.867% represents the rate at which the investment grows per year.

Using the compound interest formula, which is:

Future Value = Present Value * (1 + Interest Rate)^Time

We can rearrange the formula to solve for time:

Time = log(Future Value / Present Value) / log(1 + Interest Rate)

By plugging in the values into the formula, the calculation would be:

Time = log(26,500 / 14,050) / log(1 + 0.15867) ≈ 4.54 years

Therefore, it takes approximately 4.54 years for $14,050 to grow to $26,500 at an interest rate of 15.867%.